An appeals court has lifted an injunction against personnel decisions announced early in the year, including a planned layoff of about eight-tenths of the agency’s workforce. Image: Bob Korn/Shutterstock.com
By: FEDweek StaffIn a decision that could have wide implications for challenges to federal agencies RIFs and reorganizations, an appeals court has said that such a dispute—in this case involving the Consumer Financial Protection Bureau—must first go through the MSPB or FLRA channels rather than being brought directly into federal court.
“We hold that the district court lacked jurisdiction to consider the claims predicated on loss of employment, which must proceed through the specialized-review scheme established in the Civil Service Reform Act,” said the majority of a divided three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit.
The court lifted an injunction from a lower judge against personnel and other decisions announced early in the year, including a planned layoff of about eight-tenths of the agency’s workforce.
The lower judge had agreed with the NTEU union, the CFPB Employee Association and other organizations that the Trump administration was “engaged in a concerted, expedited effort to shut the agency down” contrary to the will of Congress, which had given it a mission and had appropriated money to carry it out.
The appeals court said the organizations were seeking “to redress injuries from agency decisions to fire employees. But a specialized-review scheme governs such claims and ousts the district courts of their arising-under jurisdiction . . . The CSRA permits federal employees to seek review of adverse personnel actions in the Merit Systems Protection Board (MSPB), which may grant relief including reinstatement, backpay, and attorney’s fees.”
Similarly, the FLRA has jurisdiction over labor disputes and “also may order reinstatement with backpay”—with decisions of both reviewable later in the federal courts, it said. It cited a U.S. Supreme Court decision holding that held that “the CSRA review scheme is exclusive even where the harmed employee contends that a governing ‘federal statute is unconstitutional.’ The same rationale controls here, where the claim is that an agency has violated the Constitution by disregarding federal statutes.”
The dissenting judge said it was unnecessary to consider that issue at all, saying that it was undisputed that at least one of the other organizations had standing to take the dispute to court. She added: “It will be cold comfort to Plaintiffs if they ultimately succeed on the merits in their challenge to the CFPB’s shutdown only to discover that Defendants have put the agency in a hole from which it can never fully recover.”
The NTEU union said the court “inexplicably paved the way for a widescale reduction in force and dismantling of operations at the Consumer Financial Protection Bureau . . . This decision could lead to widescale firings, which would result in the cessation of the Bureau’s important work protecting consumers.”
Federal unions generally have preferred bringing their challenges to Trump administration decisions in federal court, with many of those cases being brought in the federal district court for the District of Columbia—whose decisions are reviewed by the same appeals court. They view the MSPB or FLRA channels as serving to draw out a process that would result in them going to federal court in any event if they lost at that level.
In addition, the MSPB board currently lacks a quorum to hear appeals of decisions by its hearing officers. The FLRA has two members, split by party.
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See also,
What to Know About the New Federal Application Process
Top 10 Provisions in the Big Beautiful Bill of Interest to Federal Employees
A Pre-RIF Checklist for Every Federal Employee, From a Federal Employment Attorney
Work Longer or Take the FERS Supplement Now: Which is Better?
